Stock indices gained on Tuesday as the Reserve Bank of India (RBI) announced its bi-monthly policy which reduced the Statutory Liquidity Ratio (SLR) of banks by 50 basis points, while keeping other indicative policy rates unchanged.
The S&P BSE Sensex closed at 25908.01 with a gain of 184.85 points.
Realty stocks led the rally with a gain of 2.65 per cent followed by auto stocks which were up by 2.11 per cent and metal 1.33 per cent. Except capital goods stocks, which lost 0.15 per cent, all other sectoral indices ended in the positive territory.
Among broader indices, BSE-100 was up by 0.70 per cent, BSE-200 by 0.74 per cent and BSE-500 by 0.77 per cent.
Mid-cap and small-cap stocks gained 0.82 per cent and 1.12 per cent, respectively.
On the National Stock Exchange (NSE), the 50-share Nifty ended with a gain of 62.90 points to close at 7746.55.
Meanwhile, banking stocks gained only 0.28 per cent. Following a 50 basis point (bps) reduction in the June policy, the RBI announced another 50 basis point cut in SLR requirement for banks to 22 per cent.
“With the current SLR holdings of the banking system much higher than the statutory requirement, SLR reductions are unlikely to benefit banks until credit demand picks up vigorously and excess SLR comes off,” Nirmal Jain, Chairman IIFL Group, said.